I actually use the second method, much to the persistent annoyance of just about everybody I've ever worked with. It lets me see the structure of the code on a teeny font and pressures me to keep my routines small, so they fit on the screen.

I honestly am not sure why the former method is so popular. I think it's a pain to read, and quite annoying to fix when you have an unmached bracket. Those are easy to get when you're doing any sort of sigificant code building or modification.